ISLAMABAD, May 27: The World Bank will disburse $500 million Structural Adjustment loan (SAC-2) to Pakistan on June 12 immediately after its board meeting on June 11 in Washington, says a senior official of the bank.
He told Dawn here on Monday that another bank’s board meeting will be held in the first week of July to approve $100m budgetary support for Sindh government and $90m similar support for NWFP.
The $500m SAC-2 is the biggest amount to be offered to any country in one single shot at a marginal 0.75 per cent service charges. It will be extended from the Bank’s International Development Assistance (IDA) window. Earlier, Pakistan had been offered $350m SAC-1 for improving balance of payment support in 2001 which was also a single tranche disbursement.
The official said that SAC-2 will be given for carrying out structural reforms, financial management reforms, audit and accounts reforms, education reforms and oil and gas sector reforms. The money will also be available for poverty alleviation and that it will basically cover the government’s priorities contained in the Interim-Poverty Reduction Strategy (I-PRSP).
He said that it was good to see that the government was monitoring the implementation of the measures in the I-PRSP which will help increase transparency and ensure scrupulous funding to various institutions.
Sources in the multilateral agencies believed while the World Bank, IMF and the ADB were extending all necessary financial support, Pakistan will have to generate a surplus in the non-interest current account of the balance of payments of nearly one billion dollar annually over 2000-2004 or about 1.5 per cent of the GDP.
This will be in sharp contrast to average annual resource deficits of $1.5 billion, about 3 per cent GDP, run in the 1990s and will require major export expansion as well substantial import saving.
In addition, the government should also mobilize at least $3bn from privatization sales.
